Browsing by Author "Wehner, Joachim Hans-Georg"

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    Fiscal federalism in South Africa
    (Stellenbosch : Stellenbosch University, 1999-12) Wehner, Joachim Hans-Georg; Kotze, Hennie; Simeon, Richard; Stellenbosch University. Faculty of Arts and Social Sciences. Dept. of Political Science.
    ENGLISH ABSTRACT: This thesis captures the assignment of functions and resources to the national, provincial and local spheres of government in South Africa, and provides an assessment of the functionality of this assignment. The perspective of fiscal federalism is used as the analytical tool for this assessment. The discussion, in the second chapter, of considerations in the design of fiscal federalism generates the conceptual reference frameworks necessary for the assessment of the South African system. It also outlines the impact of constitutional provisions on fiscal arrangements in a country, an aspect that is further explored in the third chapter. This chapter highlights some of the key choices, relating to fiscal design, that negotiators were faced with during the deliberations on the new South African Constitution. A detailed analysis of fiscal federalism in South Africa follows in the fourth chapter. The fifth chapter concludes that there is substantial congruence between the expenditure assignment recommended by economic theory and that outlined in the South African Constitution of 1996. Revenue assignment, on the other hand, remains centralised although the theoretical framework indicates a number of sources suitable for decentralisation. While the South African Constitution allows for provincial taxation powers, these have yet to be implemented. The analysis indicates that further developments of the system of intergovernmental transfers and grants should be concerned with ensuring revenue adequacy for all spheres, providing incentives for sound financial management, and maximising predictability. The conclusion also argues in favour of activating the constitutional borrowing powers of provinces to enable a greater focus on developmental expenditures. Corruption and a lack of administrative capacity in some subnational authorities, national mandates imposed on provinces without detailed costing and impact analysis, and rising provincial personnel costs all impede the smooth running of decentralised government in South Africa. Nevertheless, economic theory indicates that the constitutional assignment of responsibilities and resources to the different spheres in South Africa should not be adjusted for the sake of greater efficiency. Instead, the challenge remains to implement the system fully and to manage transitional difficulties proactively. Decentralisation includes a learning process, and newly created structures and institutions need to be developed and strengthened before they can deliver the full benefits of decentralisation.